June 7, 2022
New Zealand King Salmon cuts workforce due to impact of COVID-19, rising sea temperatures
New Zealand King Salmon, based in Nelson, New Zealand's South Island, is cutting 139 jobs as it tries to recover financially from the effects of rising sea temperatures and the COVID-19 pandemic.
Company chief executive Grant Rosewarne said the situation is also largely a result of a lack of new water space for salmon farming and an avoidable "tragedy".
Jobs would be reduced in various parts of the company, with factory roles particularly affected, said New Zealand King Salmon sustainability and stakeholder manager Paul McIntyre.
The company was focusing on reducing jobs by natural attrition – by not replacing some staff who left – but some workers would also be made redundant, McIntyre said. Staff were currently being consulted.
The company is reducing its workforce to 441 workers, down from the 580 it had at the end of December, after forecasting a drop in production.
Rosewarne said 59 jobs had already gone through natural attrition, which he expected to ultimately account for 80% of the job losses in Nelson and Marlborough.
For the 12 months to the end of January New Zealand King Salmon reported a net loss after tax of $73 million, attributing that to a difficult year due to increased salmon deaths arising from higher sea temperatures, supply line costs from the COVID-19 pandemic and "impairments to plant, equipments and intangibles".
The financial result prompted the company to raise $60.1 million of equity to repay debt and strengthen its balance sheet through a shareholder rights offer, which it completed this month.
The bulk of its fish deaths have happened in summer in the Pelorus or Queen Charlotte Sounds, so in response to what it said is the continuing effects of climate change, the company plans to fallow three farms in the Pelorus Sound.
The effect would be reduced harvest volumes but lower mortality costs, giving the company a more stable, predictable operation, it said.
- Stuff
